Bitcoin, Ethereum and Dogecoin all sank in price after China announced measures to block cryptocurrencies from being used as a form of payment in the country. Dogecoin has hit a low of $0.36 (£0.25) today, after already seeing a massive sell-off after Elon Musk confirmed that Tesla would no longer be accepting Bitcoin payments. And it may not be the end of its decline.
On Monday, as the coin sat at $0.51 (£0.56), FX Street analyst Akash Girimath published his prediction, stating it could hit a “new all-time high”.
He said: “Dogecoin price is currently hovering inside the demand barrier that stretches from $0.48 (£0.34) to $0.522 (£0.37).
“Interestingly, this zone harbours the 100 four-hour Simple Moving Average (SMA) at $0.504 (£0.35). Hence, a quick bounce from this confluence seems likely.
“If this short-term spike pushes Dogecoin price above $0.569 (£0.49), it would confirm the start of an uptrend.
“Under these conditions, investors can expect DOGE to surge 23 percent to tag the first resistance level at $0.696 (£0.49).
“Following the breach of this ceiling, $0.739 (£0.59) is the next area of interest, the present all-time high.”
He said it could even “surge to $1 (£0.79)” in this circumstance.
But it appears his “unlikely” scenario could now unfold.
He added: “The uptrend outlook detailed above isn’t set in stone and is subject to change if the market conditions worsen.
“Therefore, a sudden spike in selling pressure that produces a close below $0.325 (£0.23) will invalidate the bullish thesis.
“Under these circumstances, Dogecoin price will likely slide 10 percent to tag $0.28.”
The news from China means financial institutions and payment companies will no longer be allowed to provide services relating to cryptocurrency transactions.
Regulators also warned investors about the volatility of the cryptocurrency market.
They said: “Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.”
Britain’s Financial Conduct Authority (FCA) has previously warned investors of the risks that come with investing in cryptocurrency.
They said: “If consumers invest, they should be prepared to lose all their money.
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.
“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”
Express.co.uk does not give financial advice. The journalists who worked on this article do not own cryptocurrency.
Published at Wed, 19 May 2021 14:01:00 +0000